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Issues Involved:
1. Whether the sum of Rs. 90,125 was profit from an adventure in the nature of trade. 2. The intention of the assessee at the time of acquiring the lease rights. 3. The relevance of the decision in Gustad Dinshaw Irani v. Commissioner of Income-tax. 4. The relevance of the decision in Saroj Kumar Mazumdar v. Commissioner of Income-tax. Detailed Analysis: 1. Whether the sum of Rs. 90,125 was profit from an adventure in the nature of trade: The main issue was whether the sum of Rs. 90,125 realized by the assessee from the sale of lease rights was profit from an adventure in the nature of trade. The facts revealed that the assessee, a registered partnership firm, had acquired lease rights to a plot of land during wartime and sold them in 1951 for Rs. 1,03,740. The assessee contended that the purpose was to build a residential house for the partners, but due to financial constraints and strategic decisions, the lease rights were sold. The Income-tax Officer, Appellate Assistant Commissioner, and the Tribunal concluded that the transaction was an adventure in the nature of trade, as the assessee had the intention to sell the rights at a profit from the outset, evidenced by the lack of construction activity despite having funds. 2. The intention of the assessee at the time of acquiring the lease rights: The intention of the assessee at the time of acquiring the lease rights was scrutinized. The Tribunal found that the assessee had no intention to build on the plot, as no construction was initiated for over three years after obtaining possession, despite having sufficient funds. The Tribunal noted that the assessee's decision to invest the proceeds in a new business indicated a profit motive from the beginning. The assessee's argument that the sale was due to financial constraints and partner disagreements was not supported by the facts, as the assessee had sufficient funds and had invested in a new business instead of constructing the building. 3. The relevance of the decision in Gustad Dinshaw Irani v. Commissioner of Income-tax: The decision in Gustad Dinshaw Irani v. Commissioner of Income-tax was considered relevant by the Appellate Assistant Commissioner and the Tribunal. In that case, similar facts led to the conclusion that the transaction was an adventure in the nature of trade. The court in the present case agreed that the facts were similar and that the Tribunal was justified in concluding that the transaction was in the nature of trade. The court emphasized that the mere intention to sell at a profit is not conclusive, but the presence of other relevant facts supports the conclusion of a trade adventure. 4. The relevance of the decision in Saroj Kumar Mazumdar v. Commissioner of Income-tax: The assessee's counsel argued that the decision in Gustad Dinshaw Irani was shaken by the Supreme Court's decision in Saroj Kumar Mazumdar v. Commissioner of Income-tax. However, the court distinguished the facts of the present case from Saroj Kumar Mazumdar, where the Supreme Court found that the transaction was not an adventure in the nature of trade due to different circumstances. In Saroj Kumar Mazumdar, the assessee had incurred significant expenditure, intended to build a residential house and a factory, and sold the rights due to financial difficulties and the non-release of land by the government. In contrast, the present case involved no significant initial expenditure, possession of the plot for over three years without construction, and a sale motivated by market conditions. Conclusion: The court concluded that the Tribunal's inference that the transaction was an adventure in the nature of trade was supported by relevant facts and evidence. The court emphasized that it could not interfere with the Tribunal's conclusion merely because another view was possible. The court answered the question in the affirmative, holding that the sum of Rs. 90,125 was profit from an adventure in the nature of trade, and ordered the assessee to pay the costs of the Commissioner.
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